Event Summary
Expedia
(NASDAQ: EXPE) has required visitors to its site to register and provide personal
information before being allowed to access any data. This has been a contrast
with other travel sites such as Netscape Travel, which typically allow surfers
to access flight information without registering. Expedia has now decided to
similarly allow surfers to access information on the site before registration.
Expedia started life as a wholly owned subsidiary of Microsoft but filed for
an IPO in November 1999. The new company will be majority-owned by Microsoft
and will retain strong contractual links to Microsoft.
Market
Impact
Websites
want registration for two reasons. First, to deliver a more personalized service
and thereby make the surfing experience more valuable to the user. Second, to
serve ads that are most likely to elicit a response. However, it has been known
for some time that a substantial proportion of users will shy away from sites
that require registration. Many sites have done their own research and decided
to provide unregistered users with access to significant amounts of free information
before asking them to register. Many surfers will give personal information
when they see that doing so has value, such as for making a purchase or gaining
access to valuable information.
Expedia
makes this change at a time when speculation about Microsoft's overall Internet
strategy is rampant. On the positive side, Expedia will quickly become a much
stronger entrant in this market. We expect it to show strongly accelerated growth
by the third quarter as long as it roughly matches the features and advertising
of other travel sites.
The
more interesting question is whether this signals a shift within Microsoft to
a less hubristic position about its Internet properties. Although Microsoft
quotes a Jupiter communications survey as its reason for dropping the registration
requirement, it should have known to do this at launch. Almost every website
or newsletter that discusses registration accepts as scripture that registration
is a barrier unless surfers see its value. In fact, a significant amount of
the back-end work on Expedia is done by Cahners Business Information (See TEC
News Analysis article: "Is
Web Success Necessary for CEO Survival?" September 25th, 1999) which
has accumulated significant experience with registration through its Manufacturing
Marketplace, one of the earliest business-to-business websites. Expedia could
have saved itself a large loss in usership (and revenues) just by talking to
its partner. If Microsoft missed ample opportunities to hear the anti-Orwellian
message that users will decide whether they want to register, it seems to have
learned it at last. Some have felt that Microsoft has not paid sufficient attention
to what has been proven to work on the net. If this small announcement from
Expedia is a signal of a change in attitude in Redmond, then users of MSN and
the dozens of other Microsoft properties will welcome it. Also, since many smaller
Web-based companies look to Microsoft as an exemplar of best practices, a turnaround
in that company's attitude could lead to improved user experience across the
net.
User
Recommendations
If you have or plan a website with registration, make sure you hook your customers
with real content and a clear and motivating reason for asking for registration
information. When you do ask for information, make sure that you only ask for
what you truly need - long registration forms and requests for unnecessary personal
information also drive surfers away.